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How Amazon HQ2 Could Turbo Charge Maryland and DC Real Estate

Amazon Will Bring A Ton Of Cash and Opportunities To North Bethesda

Amazon has officially narrowed it's 2nd headquarters down to 20 locations. But let's be optimistic. Let's think forward about just how big this Amazon move to the White Flint location, or another location in DC or Northern Virginia.

Since I live and breathe in the White Flint (North Bethesda area), I'm going to be even more optimistic that this will be Amazon's choice. Why not right?

No matter the location, you can easily transfer the affect on your local area. And the reason I'm going to be optimistic that Amazon will choose a DC, Maryland, or Virginia location is simple. Washington DC is the center of the world. Amazon founder Jeff Bezos recently bought a massive property in DC. And Jeff Bezos also owns the Washington Post.

So Jeff Bezos will want a strong presence in this area. The swamp hasn't been drained yet, and it never will be fully. So lobbying is still a BIG deal for Amazon. No better way to help out the cause by bringing a lot of money to town.

$5 Billion and 50,000 Jobs

Those are big numbers, but if you're a regular Amazon buyer of goods, the kind of investment Amazon's HQ2 would bring makes those numbers realistic. They would spend $5 billion dollars and create 50,000 jobs. The synergistic and trickle down economic effect would be massive and ongoing. The location announcement here would create an immediate surge and an ongoing flow of new money and opportunities. Here are six things you can expect to happen...

1. Expect Housing Prices To Rise

Supply and demand. Inventories are already low. Demand seems strong in 2018 already. If Amazon comes to town, there's just no way the supply will meet the demand. People who work at Amazon Headquarters will want to be within reasonable range of work. So this demand will push North Bethesda home and condo prices higher -- along with the entire radius around the campus.

2. Expect Fast Tracking of Development Projects

These six expectations really tie together. If Amazon announces White Flint as it's second headquarters, you can expect plans for developments in consideration or in a hold mode to shoot into hyper mode. There will be some kind of expedited approval process likely for any company that brings forward a development project that will work within the now modified master plan for the area.

We're talking new condo developments, mixed use, apartments, and single family and townhome developments. I'm sure the government and the developers will look at some formulas averaging the incomes of the expected influx of new workers to the area to determine some more economical housing worked into the mix. This part of the real estate component will always have strong opinions on both sides.

The arial shot above shows outlined in red the demolished, old White Flint Mall. This would be the prime area for Amazon HQ2. To give you a quick understanding of the real estate market, as a general rule of thumb, the blue arrows to the left indicate higher priced real estate. The purple areas indicate lower priced real estate. Now, for many people from other parts of the country, the purple area would still be very high priced real estate based on a home by home comparison. The point is to show there is a significant price change upwards West and South of the Rockville Pike compared to East and North of Rockville Pike.

The bottom line is there will be a lot of meetings, a lot of construction plans, a lot of legal documents, a lot of schmoozing, and a lot earth moving and concrete pouring going on for some years to come.

3. Expect Rental Rates to Rise

Back to supply and demand. Real simple. A certain percentage of new people to the area will rent, and there won't be - at least initially - enough rental units to go around. So that's the perfect storm for apartment owners to raise rents. So, if you think you're going to continue to rent in the area, immediately upon the announcement you might want to sign a long term lease.

4. Expect More Home Buyers To Push Already Low Inventory Levels

You see how these all tie together? First, some new residents from the Amazon HQ2 will want to own a home or a condo. Second, some current renters and potential new renters are going to look at the cost of rents and say, "What the ____?" and opt to find a way to buy.

So guess what that means? Home sale inventories in North Bethesda, Rockville, Bethesda, Kensington, Silver Spring, and even up to Gaithersburg, Germantown and Frederick get even tighter. And that means multiple bids for homes. And that means higher prices.

It will surely be an exciting time for home and condo sellers. Not so exciting for home and condo buyers. It can be gut wrenching to go through looking at places, putting in offers, and then losing out multiple times.

Make sure you're working with a real estate pro who is really in the know. This is not a time for part-timers and those who don't live and breathe this area.

5. Expect More Demand For All Real Estate Related and Connected Services

With 50,000 new jobs and $5,000,000 invested in the area by Amazon, the effects will run deep into the real estate business and related services. Let's just run down some of the people that will benefit:

Residential real estate brokers and agents

Commercial real estate brokers and agents

Concrete companies

Dry wall companies

Electrical contractors

HVAC contractors

Plumbing contractors

Real estate attorneys

Settlement companies

Roofing companies

Carpenters

You get the big picture. A massive trickle down effect up and down the board to companies of all sizes connected to the real estate industry.

6. Expect More Small Businesses Opportunities

But wait there's more. Imagine if you have a small business in the North Bethesda-White Flint area where the new Amazon HQ2 is going (or in DC or NOVA)...You're going to rapidly have more potential customers. This will help companies grow. This will help spur people to start a business.

The restaurants that serve great food at a fair price or with a phenomenal experience will crush it. The same goes for spas, salons, dry cleaners, and so on. The opportunities are always there. The small businesses already thriving will have the chance to really accelerate their growth. Fast moving new service businesses will have a chance of a lifetime to get up and running and fill a void.

Just remember though, this is Amazon coming to town. If you're a brick and mortar store dealing in physical goods, you better have unique products with an exceptional customer experience. Because is taking no prisoners.

And whether or not Amazon HQ2 does come to the DC METRO area, Amazon is still coming to your neighborhood...One way or another.